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SECURITIES AND EXCHANGE COMMISSION
Washington, D.C.
LITIGATION RELEASE NO. 15273 / March 4, 1997
SECURITIES AND EXCHANGE COMMISSION V. JOHN THOMAS ROYALL, Case
No. 1:97CV00435 (SS) (D.D.C.) (filed March 4, 1997)
On March 4, 1997, the Commission filed a complaint in the
United States District Court for the District of Columbia against
John Thomas Royall, formerly the Chairman of the Board and Chief
Executive Officer of Octagon, Inc. In its Complaint, the
Commission alleged that Royall violated Section 10(b) of the
Securities Exchange Act of 1934 (the "Exchange Act") and Exchange
Act Rules 10b-5 and 13b2-2 by making materially false and
misleading public disclosures on behalf of Octagon. More
specifically, the Complaint alleged that Royall failed to make
timely and accurate disclosures about material related-party
transactions between Octagon and PRK Group, Inc., a company of
which Royall's wife was a one-third owner, and that he made
materially false and misleading disclosures about a major
contract between Octagon and James Mackenzie International
Trading PLC. Without admitting or denying the allegations in the
complaint, Royall consented to the entry of a final judgment
imposing a $35,000 civil penalty against him.
In a related matter, the Commission issued an administrative
order pursuant to Section 21C of the Exchange Act against Royall,
finding that he committed or caused violations of Exchange Act
Section 10(b) and Exchange Act Rules 10b-5 and 13b2-2 and
ordering him to cease and desist from committing or causing any
violation or future violation of these provisions. Without
admitting or denying the matters set forth in the Commission's
order, Royall consented to its entry.